Canadian tax news

Your source for the latest Canadian tax news and updates on changing tax laws. Working collaboratively with the Canada Revenue Agency (CRA) we aim to bring clarity on pressing tax questions and tax updates.

Please visit our archive page for content from 2020. There are no posts on this page older than 2020.


On November 21, the Deputy Prime Minister and Minister of Finance released the federal government’s 2023 Fall Economic Statement (FES), which contained some new tax announcements along with an update on previously announced tax measures.

As many are aware, new rules were enacted in 2022 to expand the filing requirements for trusts.

As a result of these new rules, registered charities were seeking clarification on how these new requirements apply to internal trusts.

The CRA recently issued an email to those on their “Charities and Giving – What’s new” mailing list indicating the following:

The CRA will not require registered charities to file the T3, Trust Income Tax and Information Return, for internal trusts.
Internal trusts are those created when a charity:

  • receives property as a gift that is subject to certain legally enforceable terms and conditions; and,
  • holds that property as the trustee of the trust.

Canada’s enhanced mandatory disclosure rules include a requirement to report notifiable transactions. 

A transaction becomes a notifiable transaction if it is the same or substantially similar to one that is designated by the Minister of National Revenue. CRA has recently published the list of designated transactions and series of transactions, effective November 1, 2023. For further information, please see CRA’s website.

The Minister of National Revenue announced on October 31, 2023, that owners affected by the Underused Housing Tax (UHT) will have until April 30, 2024, to file their returns for the 2022 calendar year without being charged penalties or interest. Please see CRA’s news release for further details.

The CRA is introducing new and improved online processes and digital service options for taxpayers and practitioners. Read our latest tax blog to know more about these enhancements and changes. 

On September 21, 2023 the Deputy Prime Minister and Minister of Finance introduced Bill C-56, the Affordable Housing and Groceries Act, which removes the GST on new rental housing construction.

On August 4, 2023, Finance Canada released revised legislation on tax rules to consider when owners transfer their businesses to family members or employees. Our latest tax blog looks at out how these measures might apply to business succession in 2024 and later years.

As we have previously reported (see our July 21 news item), a significant issue we had raised with the Canada Revenue Agency (CRA) was whether limitation of liability clauses, commonly used in professional engagement letters, would trigger a reportable transaction reporting hallmark under the new Mandatory Disclosure Rules (MDR).  In the CRA’s most recent update of their MDR guidance, the agency indicates:

“A limitation of liability clause in a professional engagement letter would normally not, in and of itself, trigger a reportable transaction reporting hallmark, provided that the purpose of the limitation clause is to generally limit the accountant’s liability for negligence (i.e., it is related to professional indemnity insurance.”

It’s been a busy year in the tax world, with ever changing tax legislation and administration to keep on top of. We’ve rounded up some key tax developments that practitioners should have on their radar as we enter the fall.

CPA Canada recognizes that the Canada Revenue Agency’s (CRA) initial guidance, released on July 5th, did not address all our members questions regarding administration of the rules.

The Canada Revenue Agency (CRA) has released guidance on the mandatory disclosure rules (MDR). With the Joint Committee on Taxation, we have been working with the CRA to bring issues forward that require clarification regarding the administration of the MDR. In this initial guidance provided, the CRA addressed some of our identified issues, including our request for timely guidance. We will continue to collaborate with the CRA to bring forward issues in need of clarification, including recommendations on streamlining the reporting process.

On March 28, 2023, the federal government released the final legislation on expanded tax reporting requirements aimed at detecting and preventing inappropriate tax plans. Read our latest tax blog to know more about the final proposals, improvements and concerns that are still outstanding. We will be communicating issues and questions in respect of the new rules to the Canada Revenue Agency. Updates will also be provided as new information becomes available, so watch this page for developments. 

The Canada Revenue Agency (CRA) has recently published some best practices for businesses and tax preparers making a Scientific Research and Experimental Development (SR&ED) tax credit claim. To ensure an efficient process for claimants, the CRA also shares common errors seen in SR&ED claims. See the CRA’s website for further information.

While the Canada Revenue Agency’s (CRA) announcement of an administrative extension for Underused Housing Tax (UHT) returns and payments for the 2022 calendar year was welcome, we know many members are still concerned about the impact of the UHT on Canadian owners.

Budget 2023 announced two sets of tax rules to consider when owners transfer their businesses to family members and employees. Read our latest blog to understand the implications of these measures on business succession in 2024 and later years. 

The Canada Revenue Agency (CRA) has been reopening drop boxes across Canada after being shut down for several years due to the pandemic. The CRA indicates that the reopening will be phased in as drop boxes become ready for use. For further information, see CRA’s webpage.

The Canada Revenue Agency (CRA) has recently updated the Underused Housing Tax Notice (UHTN15) Questions and Answers About the Underused Housing Tax with more Q&As. Many of these questions are ones we have passed along to the CRA. We understand the CRA will continue to update this page as more questions arise, and/or as further guidance can be provided.

The Canada Revenue Agency (CRA) has recently created a webpage where it indicates it will provide updates on how potential labour disruptions may impact their services along with some preliminary information. We will also keep you updated as we learn of any new developments, and pass on feedback to the CRA as issues arise. 

Watch now: 2023 Federal Budget Tax Highlights webinar

Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled this year’s federal budget on March 28, 2023. Watch CPA Canada’s webinar in English and French to better understand the most important tax measures contained in this year’s budget. In addition, don’t forget to download the Tax Highlights document.

To provide more time for taxpayers, the Canada Revenue Agency (CRA) has announced that penalties and interest will be waived under the Underused Housing Tax Act for the 2022 calendar year, provided the return is filed and any UHT due is paid by October 31, 2023.  For further details, please see CRA’s news release.

As the CRA continues to enhance its online processes for interacting with taxpayers and practitioners, we’ve collated some of the recent key changes introduced. Read our latest blog to know more

Sole proprietors who may want to use the same representative for both their business and personal taxes may now be eligible to do so without them having to register for the Canada Revenue Agency’s My Business Account and go through the Confirm my Representative process.

As noted in our February 8, 2023, news item, the CRA recently published additional UHT Notices (UHTN6 through UHTN11). As such, we’ve updated our UHT blog to provide further information on determining the primary place of residence, as well as continuous occupancy for UHT purposes. We’ve also added a new section that highlights some considerations for partnerships versus co-ownerships.

As noted in our October 26, 2022, news item, the CRA had provided us with their responses to questions we posed to them on the new Form T1134. The CRA has recently updated its Questions and answers about Form T1134 webpage to include these questions and responses.

As T1 season approaches, it is important to take note of new tax measures and other changes for 2022 personal income tax returns so you can better serve your clients. Read our latest blog to learn more about key considerations for this year’s filing season.

Registration for an Underused Housing Tax (UHT) program account (RU) is now open. For owners who will be required to file a UHT return for 2022 and will need to register for an RU program account, we recommend you do this soon.

As you may have read in our latest blog, the new Underused Housing Tax (UHT) is aimed primarily at non-residents of Canada, but others may also be caught. It’s important to understand the rules to ensure you, or your clients, are not subject to the tax, and/or required to file the UHT return.

The federal government’s new Underused Housing Tax (UHT) will primarily impact non-residents of Canada but may also apply to Canadian owners in some situations. For example, where a residential property is held in trust for Canadian resident beneficiaries, there may be a requirement to file a return even though no non-residents have an interest in the property and no tax is payable after applying an exemption. The penalty for not filing a return can be significant. Read our latest blog post to know more about the requirements and exemptions applicable to the UHT.

During 2022, CPAs across the country were canvassed to pose the top questions they have for the CRA. View the CRA’s responses to these questions.

As we wrap up 2022, here is a summary of some significant tax developments that took place in the second half of the year.

CPA Canada co-hosted a webinar with the CRA to review updates to the SR&ED program. In this session, the CRA provided an overview of the program and highlighted upcoming initiatives that will transform it. Watch this video to learn more about the most common trends seen on the field and hear the answers to some of the top questions from CPA Canada's SR&ED Committee.

The federal government has released new details about the Tax-Free First Home Savings Account, a new registered account to help individuals save for their first home. Read our latest blog post to find out who qualifies and other key features of these plans.

The CRA has recently updated its webpages, Gifts, awards, and long-service awards and Social events and hospitality functions, which include a number of new or revised CRA administrative policies that address the following scenarios:

  • Employer provided in-person (or hybrid) social events for employees 
  • Employer provided virtual social events for employees 
  • Gift cards provided by an employer to employees and, in particular, situations where these cards will not be considered “near cash” gifts

For further information, please see the CRA webpages.

As part of Bill C-32 (Fall Economic Statement Implementation Act, 2022), proposed legislation to implement the new FHSA program was included and there were several revisions from the previous draft legislation released on August 9, 2022.

On November 4, 2022, Bill C-32 (Fall Economic Statement Implementation Act, 2022) was tabled in the House of Commons. This bill implements some of the tax proposals from the 2022 Fall Economic Statement, along with several previously announced tax changes. In one major change, the coming into force date for the trust reporting rules has been postponed by one year. These rules will now apply to trust taxation years that end after December 30, 2023. Otherwise, it appears that the legislation for the trust reporting rules is unchanged. 

We are in the process of reviewing the legislation and will provide more information as it becomes available. 

On November 3, the Deputy Prime Minister and Minister of Finance released the federal government’s 2022 Fall Economic Statement (FES), which contained several new tax announcements along with an update on previously announced tax measures.

As mentioned in our August 22, 2022 news item, “Update on electronic notices of assessments”, Finance Canada recently proposed legislation that would allow the Minister of National Revenue to provide a notice of assessment (NOA) electronically to an individual who filed their personal income tax return electronically, and has authorized that notices or other communications may be made available in this manner. 

From a recent discussion with the Canada Revenue Agency (CRA), it is our understanding that there will be no changes in the process for issuing personal NOAs until at least 2024. We will keep you posted as we get additional information.

We received a number of questions regarding the revised version of form T1134, which we passed along to the CRA. The CRA has responded to all our queries and plans to update its T1134 Q&A page as soon as the French translation has been completed. The CRA has asked us to share the English responses with our members as it recognizes the October 31 filing due date for many reporting entities is fast approaching. We will post an update when these responses are on the CRA’s website in both languages.

As a follow up to our September 12, 2022 news item, “Questions on the new Form T2054 – Election for a Capital Dividend Under Subsection 83(2)”, the Canada Revenue Agency (CRA) has responded to our question on whether taxpayers can continue to use the previous version of the T2054 until tax software developers have incorporated the new T2054 into their products.

The CEBA website has been updated to reiterate that the December 31, 2022 forgiveness repayment deadline will be extended to December 31, 2023 for eligible CEBA loan holders in good standing. If CEBA participants are in good standing and qualify for the new extended term, they will be contacted by their financial institution with details regarding the new repayment date. The website also provides more guidance on repayment and forgiveness terms in the FAQ section.

Due to increased concerns with identify theft, Confirm my Representative was introduced by the Canada Revenue Agency (CRA) as a new two-factor authorization process for confirming the representative and preventing client information from being given to unauthorized representatives.

As discussed in prior news items and tax blog, the federal government has announced proposals that will require additional reporting for “reportable transactions” and “notifiable transactions.”

Trust reporting rules are changing for 2022 returns due in 2023. Under this new regime, trusts will be required to file a T3 Trust Income Tax and Information Return annually for tax years ending on or after December 31, 2022, including trusts that have never filed before. Our latest tax blog on trust reporting outlines the expanded reporting requirements for trusts set out in the August 9, 2022 draft legislation.

The Canada Revenue Agency is escalating their scrutiny of personal services businesses. In a recent stakeholder email, the CRA announced its newest educational campaign focusing on potential PSB arrangements. In response to this campaign, our newest tax blog presents an overview of the PSB rules and sets out some leading practices to consider for taxpayers that deliver services through a corporation.

As we have previously reported, the government announced in the 2021 federal budget, followed by draft legislation released on February 4, 2022, that it would be providing the CRA with the ability to send certain Notices of Assessments (“NOAs”) electronically without the taxpayer having to authorize the CRA to do so (“NOA proposal”).

On August 9, 2022, the federal Department of Finance (Finance Canada) released a large package of draft legislation covering several tax measures from the 2022 federal budget and previous announcements.

We know you’re busy and it can be hard to keep track of what’s new. We’ve put together a list of some past news items and blogs that you may have missed but are still worth a read.

Further to our June 13 news item, the CRA has now published an updated T2 Schedule 63 –  Return of Fuel Charge Proceeds to Farmers Tax Credit which appears to now correctly compute the credit. We understand that tax software providers have included the update, or will soon be including it, in their software.

As reported in our November 9, 2021, news item, the Disability Tax Credit Promoters Restriction Act (DTCPRA) has been suspended until further notice due to a court injunction.

While the court case has not yet concluded, the CRA has updated its interpretation of the services to be included in the $100 DTC fee cap. Question 7 on the CRA Q&A to the DTCPRA webpage now indicates that the $100 DTC fee cap on promoters will not apply to work done to assist with the filing of notices of objection, where previously the CRA only listed work related to appeal to the Tax Court of Canada.

The CRA has updated Form T2201, Disability Tax Credit CertificateGuide RC4064 Disability-Related Informationand other online resources and tools to reflect amendments included in Bill C-19 (Budget Implementation Act, 2022, No. 1) to improve access to the Disability Tax Credit (DTC). The CRA has indicated that it will continue to enhance the DTC webpages to make it easier for individuals to review eligibility for the credit, to apply and to learn what other benefits they may have access to if they qualify.

We continue to provide feedback to the CRA on the DTC forms, tools and resources and will keep you informed of relevant new developments.

On June 9th, 2022, Bill C-8, An Act to implement certain provisions of the economic and fiscal update tabled in Parliament on December 14, 2021 and other measures, received Royal Assent.

We have learned that there is an issue with new T2 Schedule 63 (Return of Fuel Charge Proceeds to Farmers Tax Credit) as the calculation on this form does not appear to agree with the draft legislation for the credit contained in Bill C-8 (Economic and Fiscal Update Implementation Act, 2021). For corporations that are allowed to claim the credit, the credit is based on the total of all amounts deducted in the year by the corporation in computing Part I income from farming activities, excluding inventory adjustments and non-arm’s length transactions. However, on Schedule 63, the CRA has used line 9898 from T2 SCH 125 as the starting point for the calculation. This is incorrect, as this line represents total farm expenses for accounting purposes from the corporation’s financial statements which may not necessarily agree with what the corporation actually deducted for tax purposes. The CRA is reviewing the issue.

We will provide an update as more information is obtained.

We understand that the CRA has released a new version of T2 Schedule 141 in the May 2022 tax preparation software updates. The new form allows CPAs to better describe their involvement in T2 preparation. We have summarized how we assume the new form will be completed for the following common engagements.

The Joint Committee on Taxation (JC) made a submission in response to the government’s consultation on the draft legislation released on February 4, 2022 relating to the Reporting Requirements for Trusts.

As noted in our April 27, 2022 news item, the CRA has indicated that since the final draft legislation on immediate expensing has been released, taxpayers can include immediate expensing in the calculation of their capital cost allowance (CCA) deduction.

The federal government has recently released a Notice of Ways and Means Motion (with draft legislation) to implement certain provisions included in the 2022 federal budget as well as some other previously announced measures. Included in the release are final draft rules on the immediate expensing rules first announced in the 2021 federal budget and then expanded in the 2022 budget.

In a communication to us, the CRA stated that since final draft legislation was released, taxpayers can include immediate expensing in the calculation of their capital cost allowance (CCA) deduction. However, adjustment requests to recognize immediate expensing for returns that have already been filed cannot be processed until after Royal Assent has been received.

On April 20, the Canada Revenue Agency (CRA) posted a reminder on the EFILE news and programs update page on the proposed Return of Fuel Charge Proceeds to Farmers Tax Credit and the Eligible Educator School Supply Tax Credit. The CRA has again stated that returns containing a claim for these credits cannot be assessed until Bill C-8 (Economic and Fiscal Update Implementation Act, 2021) receives Royal Assent. We provided more background information on this issue in our March 3 news item and considerations for taxpayers who are in a refund position.

As noted previously in our December 21, 2021 news item, Bill C-2 (An Act to provide further support in response to COVID-19) contained a change that may restrict Canada Emergency Wage Subsidy (CEWS) claims made by a publicly traded company or a subsidiary of such a company that paid dividends to an individual who held common shares. One area of confusion was on the effective date of the change.

The Canada Revenue Agency (CRA) recently posted an update on the filing requirements for individuals who are applying the tax changes in Bill C-208 for intergenerational transfers.

Watch now: 2022 Federal Budget Tax Highlights webinar

Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled Canada’s federal budget on April 7, 2022. CPA Canada hosted a webinar in English and French to provide an overview of the most important tax measures contained in this year’s budget and to address some key questions raised by members. In addition, you can download the Tax Highlights.

The Canada Revenue Agency (CRA) publishes its audit manuals and policy documents on the following page. The CRA has recently published 3 updated policies.

The CRA has recently informed us that it has revised its guidance, which we originally summarized in our March 8 update, on how to deal with questions 1, 3, 4, 6, 7, 8 and 9 where a note must be attached to a T3 return that is being EFILED. The CRA has now advised us that this information only has to be retained by the taxpayer in their records in the event the CRA asks to see it at a later date.

Further to our March 8 update on T3 EFILE, we have received a communication from the CRA on the proposed changes on electronic filing for tax preparers contained in subsections 150.1(2.2) and (2.3) of the Income Tax Act.

On March 11, Finance Canada released draft legislation on the Luxury Tax that was proposed in the 2021 Federal Budget. Subject to parliamentary approval, the tax will apply beginning on September 1, 2022. Finance Canada’s news release states that “two notable new provisions” are included in the legislation:

  • relief is proposed to be provided to after-sale improvements that are made to vehicles, aircraft or vessels purchased below the relevant price threshold; and
  • relief for aircraft is proposed to be expanded to take into account qualifying flights that are conducted in the course of a business with a reasonable expectation of profit.

We have received additional information from the Canada Revenue Agency (CRA) on T3 EFILE, which we wanted to pass on along with some other issues to keep in mind with the introduction of T3 EFILE.

As noted in our recent tax blog, there are several Budget 2021 proposed tax measures that would impact 2021 personal income tax returns. As these measures have not yet been enacted, there has been uncertainty on how affected taxpayers should file T1 returns.

Further to a recommendation we made last spring, the CRA has recently updated its MFA process by allowing users to opt whether they want to input the MFA passcode each time they sign in, or to just input the “one-time” MFA passcode once every 8 hours if the user is using the same device.

The CRA released the 2021 versions of the T2200S Declaration of Conditions of Employment for Working at Home Due to COVID-19 (T2200S) and T777S Statement of Employment Expenses for Working at Home Due to COVID-19 (T777S) for employee home office expense claims. Both forms are similar to last year’s versions. The CRA has also highlighted the criteria that must be met for employers interested in automating the completion of electronic T2200S forms.

It has come to our attention that during the CRA Q&A session on January 13, there was an issue with an answer provided in respect of T4 reporting, and, in particular, whether amounts are required to be reported for T4 codes 57 to 60 for 2021 T4s. The CRA has confirmed that this additional reporting requirement applied only for the 2020 calendar year and therefore, no additional reporting is required for 2021.

The CRA has updated their webpage on the proposed trust reporting rules with the following message:

The legislation to support this proposed measure is pending. The CRA will administer the new reporting and filing requirements once there is supporting legislation that receives Royal Assent. The CRA will continue to administer the existing rules for trusts, under enacted legislation. The proposed beneficial ownership reporting requirements will not be part of the published 2021 T3 income tax return. This note will be updated when more information is available. You should not delay filing your 2021 T3 tax return.

Yesterday afternoon, CRA sent an email notifying key stakeholders that the CRA is hosting interactive question and answer sessions on the Canada Recovery Hiring Program, the Tourism and Hospitality Recovery Program, and the Hardest-Hit Business Recovery Program.

The CRA recently provided an important update to its My Account (MyA) services. Starting in February 2022, the CRA will require taxpayers to provide their email address to use MyA as an additional security measure to protect taxpayers’ personal information.

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